Social Security faces an insolvency crisis in less than a decade, just shy of its 100th anniversary. (Illustration by Kevin Dietsch/Getty Images)
Social Security’s retirement trust fund will face a funding shortfall in 2032, a year earlier than last year’s projections. If Congress doesn’t act, the "go-broke" date would trigger an automatic cut to benefits.
The backstory:
Social Security was established when President Franklin D. Roosevelt signed the historic Social Security Act bill into law on August 14, 1935.
In 1939, the Old-Age, Survivors, and Disability Insurance (OASDI) fund was created pursuant to section 201 of the Social Security Act Amendments of 1939 and created a separate account in the United States Treasury where payroll taxes received under the Federal Insurance Contributions Act and the Self-Employment Contributions Act are deposited.
The 1939 amendment also established the OASDI Board of Trustees to oversee the financial status of the Social Security trust funds. The board is headed by the Secretary of the Treasury as Managing Trustee, alongside the Commissioner of Social Security, the Secretary of Health and Human Services, and the Secretary of Labor and two public trustees appointed by the President.
By the numbers:
Today, the retirement program provides benefits for 63 million Americans. The retirement trust fund faces a funding shortfall mainly due to the result of lower projected birth rates, recent federal tax adjustments that reduced tax liabilities on benefits, which has lowered expected income tax revenue into the trust fund, and reduced immigration, resulting in a lower ratio of active workers paying payroll taxes, according to the 2026 OASDI Trustees Report.
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The nonpartisan think tank, the Committee for a Responsible Federal Budget (CRFB), recently compiled an illustrative report projecting the financial impact for each state if the retirement trust fund goes insolvent in 2032, triggering a 24% benefit cut.
CRFB says the U.S. average monthly benefit cuts would be $500, with Connecticut, Delaware, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, Utah, and Washington, seeing the largest cuts.
In 47 states, CRFB says more than 15% of the population would be directly impacted, with Delaware, Maine, Michigan, Montana, New Hampshire, Pennsylvania, South Carolina, Vermont, West Virginia, and Wisconsin impacted the most.
Committee for a Responsible Federal Budget (CRFB) end notes:
The Social Security Old-Age and Survivors Insurance program provides benefits to workers in retirement, widow(er)s age 60 and older, young widow(er)s with children in care, their dependent children, and to parents age 62 and older who were dependent on a child who died.
According to the latest estimates from the Social Security Administration, Social Security’s Old-Age and Survivors Insurance trust fund will become insolvent in late 2032, at which point total benefits are projected to need to be reduced by 24% in accordance with the law. This report simulates the effects a 24% across-the-board benefit cut would have on retirees today using 2024 data on beneficiaries from the Social Security Administration’s report on OASDI beneficiaries by state and county and the Bureau of Economic Analysis’ 2024 state GDP figures. The actual effects of insolvency in 2032 will differ somewhat based on demographic and economic trends up to that point.
According to the 2024 Consumer Expenditure Survey, households with a reference person over the age of 65 spent an average of $5,251 on food at home in 2024, or $438 per month. Accounting for inflation, this figure would equal $461 in 2026.
Figures as of March 2026.
The Source: This article includes information from the Social Security Administration (SSA), the Committee for a Responsible Federal Budget (CRFB), The Associated Press, and previous FOX Local reporting. This story was reported from Orlando.